Premium
Foreign Aid, Innovation, and Technology Transfer in a North–South Model with Learning‐by‐Doing
Author(s) -
Benarroch Michael,
Gaisford James D.
Publication year - 2004
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2004.00238.x
Subject(s) - technology transfer , context (archaeology) , developing country , economics , consumption (sociology) , transfer of learning , transfer (computing) , international economics , industrial organization , international trade , economic growth , computer science , sociology , paleontology , social science , machine learning , parallel computing , biology
The paper examines foreign aid in the context of a dynamic Ricardian model of trade and development that highlights the role of learning in both the initial adoption of new technologies and products and their eventual transfer from developed to developing countries. When aid is paid as a pure unilateral transfer, the conventional short‐run terms‐of‐trade improvement that results from a home bias in consumption causes harmful delays in the transfer of technology that can lead to mutual immiserization. Conversely, aid that directly or indirectly expedites technology transfer and learning in developing countries can be mutually beneficial.